Obama: Rethinking 121 programs yields $17B
WASHINGTON, May 7 (UPI) -- U.S. taxpayers would save nearly $17 billion in the next year if 121 programs are reduced or eliminated, U.S. President Barack Obama said Thursday.
"Some programs may have made sense in the past -- but are no longer needed in the present," Obama said in outlining the proposed reductions in spending. "Other programs never made any sense -- the end result of a special interest's successful lobbying campaign. Still other programs perform functions that can be conducted more efficiently."
He said $35 million a year would be saved by cutting a long-range radio navigation system, "which once made a lot of sense" but now is obsolete.
Another program, the National Institute for Literacy, used about half of its federal allocation for overhead, Obama said when recommending that the program's $6 million be cut.
He also recommended closing an office maintained by the Department of Education in Paris, which "costs hundreds of thousands of dollars to employ one person as a representative to ... UNESCO," he said.
Defense spending would be trimmed as well, Obama said, "by eliminating unnecessary defense programs that do nothing to keep us safe -- but ... prevent us from spending money on what does keep us safe."
The total savings would be "more than enough" to pay for a $2,500 tuition tax credit and a larger Pell Grant award, with enough funds left over "to pay for everything we do to protect the national parks," Obama said.
Responding to critics who said the proposed cuts represent only a minuscule portion of the $3.4 trillion budget for fiscal year 2010, Obama said, "(Outside) of Washington, that's still a lot of money."
Obama said he called on Congress to restore the "pay as you go" rule, which states new spending must be balanced with budget cuts or new revenue.
Obama said the $17 billion in proposed savings would be in addition to savings Obama called for in February, including proposed reductions in a Medicare program and limits on deductions wealthy taxpayers can claim. The $17 billion also is separate from $100 million in savings Obama outlined in April, when he directed his Cabinet to find new departmental reductions.
N.Y. Fed chief resigns 'immediately'
NEW YORK, May 7 (UPI) -- The chairman of the Federal Reserve Bank of New York, Stephen Friedman, resigned Thursday, rejecting suggestions his service on the board is "improper."
Friedman simultaneously sat on the board of Goldman Sachs Group Inc. while serving as chairman of the New York Fed. In his resignation letter to board President William Dudley, Friedman noted that he had agreed to remain on the board last fall after Goldman Sachs became a bank holding company.
Friedman held a substantial stake in Goldman Sachs while the Fed developed a strategy to help Wall Street banks survive the financial crisis, The New York Times reported Thursday. The Fed issued a policy waiver requested by the New York Fed, but while the Fed considered the request, Friedman acquired 37,300 Goldman shares -- which have gained $1.7 million in value, the Times said.
New York Fed General Counsel Thomas C. Baxter issued a statement Thursday saying "it is my view that these purchases did not violate any Federal Reserve statute, rule or policy."
However, The Wall Street Journal reported this week that Friedman's role at Goldman constituted a violation of Fed policy.
"Today, although I have been I compliance with the rules, my public service motivated continuation on the Reserve Bank Board is being characterized as improper," Friedman wrote in his letter to Dudley. "The Federal Reserve System has important work to do and does not need this distraction."
The New York Fed said Denis M. Hughes, deputy board chairman, will serve as interim chairman, the Times reported.
High winds whip fire near Santa Barbara
SANTA BARBARA, Calif., May 7 (UPI) -- A wildfire raged out of control near Santa Barbara, Calif., Thursday, forcing 13,000 residents to flee and destroying at least 20 homes, fire officials said.
Wildfires also burned in Arizona near the Mexican border, injuring one person and destroying three homes, officials said.
The Jesusita fire in Santa Barbara County, fueled by high temperatures and low humidity, engulfed mansions in foothills of the tony coastal community, CNN reported. The fire remained uncontrolled late Thursday afternoon, KFSN-TV reported.
"When it's really high winds, our helicopters can't fly because of the erratic winds, smoke conditions, and also, the fixed wings also can't fly," Capt. David Sadecki of the Santa Barbara County Fire Department said.
California Gov. Arnold Schwarzenegger declared a state of emergency Wednesday in Santa Barbara County.
An emergency shelter was set up at Dos Pueblos High School in Goleta, while residents could take large animals to the Earl Warren Showgrounds.
In Arizona, the National Forest Service reported fire scorched about 4,000 acres near Sierra Vista, destroying three homes and sending one resident to the hospital with third-degree burns, CNN said.
Three smaller fires in the area were largely or fully contained, fire officials said.
Drew Peterson arrested in 3rd wife's death
BOLINGBROOK, Ill., May 7 (UPI) -- Drew Peterson, a former Illinois police sergeant, was arrested Thursday in connection with the death of his third wife, Kathleen Savio, police said.
Will County State's Attorney James Glasgow told reporters at a news conference Thursday night Peterson has been charged with two counts of first-degree murder in Savio's death, the Chicago Tribune reported. Glasgow said the arrest warrant provided for Peterson to be held on $20 million bail.
"I requested the $20 million bond because I felt this was as grave and serious a case as I've ever handled," Glasgow said.
He said a judge also signed a warrant for a search of Peterson's home.
Peterson, 55, has been the subject of widespread speculation in the case, in which Savio was found drowned in an empty bathtub in March 2004 with a gash in her scalp. An autopsy determined she had drowned and the coroner's office determined the death was accidental, but the case was reopened after the October 2007 disappearance of Peterson's fourth wife, Stacy, who is still missing.
Savio's remains were exhumed and a second autopsy concluded her death was a homicide.
Peterson's attorney, Joel Brodsky, told the newspaper he was unaware of the arrest early Thursday evening but another attorney for Peterson, Andrew Abood, issued a statement saying the former Bolingbrook Police Department sergeant continues to maintain his innocence in the death of Savio.
"Although he is disappointed with the decision of the state, he looks forward to the opportunity to once and for all prove his innocence in a court of law," the statement said.
Representatives of Savio's estate last month filed a wrongful death lawsuit against Peterson.
Peterson collects a $6,068 monthly pension from the police department, which suspended him after the disappearance of Stacy Peterson, the Tribune said.
Three of Peterson's four children have been placed in the custody of the Illinois Department of Children and Family Services and police were searching Thursday night for the fourth child, the newspaper said.
